Indonesia trade deal expected soon in 'big win' for grain growers

Indonesia free trade agreement expected soon in 'big win' for grain growers

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BIG WIN: The feed grain part of the agreement will be a boon for growers.

BIG WIN: The feed grain part of the agreement will be a boon for growers.

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The long-awaited free trade agreement with Indonesia is expected to be ratified in the coming days.

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AUSTRALIA'S long-awaited free trade agreement with Indonesia is expected to be ratified in the coming days, and it's got some big wins for the grain industry.

Indonesian president Joko Widodo is set to address the Australian parliament on Monday, his first visit in three years, leading many to believe the deal will be official signed off on around the same time.

Within the ag sector, the grains industry is particularly looking forward to the deal being signed, sealed and delivered.

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GrainGrowers chief executive David McKeon said Indonesia was Australia's number one wheat market, with about 20 per cent of wheat exports, or $1.5 billion, heading there annually.

"However, with challenging years across the east coast, we haven't delivered as much grain into Indonesia as we have historically," Mr McKeon said.

"But we're going to have a bumper crop one year soon - whether it's this year or next year.

"So ensuring we've got the right long-term relationship with Indonesia as a trading partner is critical."

Mr McKeon said if the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) was approved in the near future, it would be "perfect timing", due to the feed grain quota that's been negotiated.

"We're coming off a dry year, but we're hopefully looking at a good season coming through," Mr McKeon said.

"What we have in there is an agreement to a 500,000 tonne quota for feed grain - which will grow year-on-year after introduction, which can be a mix of barley, wheat and sorghum."

Previously, Indonesia has not bought big volumes of Australian feed grain.

Mr McKeon said the second win from the grains perspective in the agreement was the strategic grains partnership

"So that's investing in the relationship with our Indonesian partners, Indonesian flour millers and Indonesian food industries, to ensure we've got the right relationship between all parties involved," he said.

"That helps to ensure we're a preferred customer and partner with Indonesia.

"That's two big wins for us right there."

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